At least £21tn in being hidden in global tax havens

22-07-2012 10:00PM

goose2005 wrote: »

The vast majority of the super-rich get that way with connections, inheritance, corruption, monopolies, or outright theft.

Sounds like politicians you're describing there

token101 · 22-07-2012 10:04PM

bluewolf wrote: »

Sounds like politicians you're describing there

Sure half the Arab Sheikhs, Russian Oligarchs and the Chinese tycoons are politicians!

bnt · 22-07-2012 10:56PM

All you folks saying "tax it, tax it" are missing an important point: most countries do not have a wealth tax, and aren't likely to start one. They have an income tax, which taxes the amount of money earned that year but does not touch stored wealth. Tax on Capital Gains is the same: it's a tax on the gains, not on the capital itself.

There have been calls for a wealth tax on assets to be started in Ireland e.g. this piece late last year. A true wealth tax is politically controversial, to put it politely, and probably wouldn't get many votes here, in my opinion. France just increased theirs drastically, since they have a new Socialist government. Depending on who you talk to, it may already have cost France dearly.

Piste · 23-07-2012 12:49AM

How exactly are people not paying income tax and storing it abroad?

squod · 23-07-2012 01:11AM

sock puppet wrote: »

I'd be interested to hear how speculation has absolutely no economic benefit.

If that's what you believe then google it for yourself.

23-07-2012 06:51AM

Capt'n Midnight wrote: »

LOL

The super rich are paying a lower % of tax on thier income than the rest of us. That means we are subsidising them

I've pointed out that the super rich make money on shuffling paper around. The fortunes the bond holders are making on Eurozone loans aren't generating wealth for anyone else.

They aren't investing, that money will move very quickly if there is a better offer.

When individuals hold more wealth than 100,000,000 people in the richest nation on earth it's obscene.

They may be paying a lower % but in nominal terms, they pay over half the tax intake in Ireland, even with moving money abroad.

The fortunes of the bond holders? You realise the main holders of these bonds are pension funds and low risk mutual funds.. Ie. You and me. I really can't emphasise this enough.. People who have a pension are bond holders.
The returns don't come near to the hedge fund industry apart for some low risk investments to balance out the riskier ones.

I agree with the last point but it's very very rare.. Even the richest bankers in the world (fund managers etc.) aren't obscenely rich. They make alot if they're good at investing non-rich peoples money. There are obviously insanely rich people but that's capitalism.

I used do the accounts of hedge funds and saw all this on a daily basis.. The fund could be worth a billion dollars but that's 1,000s of people's investments in the fund.

squod wrote: »

Speculators create 0 jobs. Plenty of them are super rich.

Speculators invest other peoples money and take a %.. If they invest their own money, what's the problem? They got it from somewhere.
Speculation is pretty damn important to an economy if it's done in a regulated manner. They provide the capital to new businesses in the same way a bank does. And the money they use has usually been taxed in some way beforehand.

Capt'n Midnight · 23-07-2012 10:11AM

Deleted User wrote: »

They may be paying a lower % but in nominal terms, they pay over half the tax intake in Ireland, even with moving money abroad.

Rich is not super-rich

Don't lump all the top rate PAYE payers in with the super-rich. Yes the top 10% might pay half, but the top 0.1 % or even 1 % pay a disproportionately low share relative to their income.

During the 1978 top rate of tax (PRSI + PAYE + Levy's) was over 70% and over 70% of total tax receipts (excise + motor tax + VAT + corporation +CGT +PAYE+self employed) was from PAYE alone.

Lots of examples of people paying ZERO tax.

http://www.finfacts.ie/biz10/irishtaxpayeselfemployedhighearners.htm

The Revenue has revealed that it estimates that tax breaks available to high earners are costing €8.3bn each year. The figures relate to 28 generous relief schemes provided by the Government including investments in hotels and holiday homes. However, the Revenue has not provided estimates of the cost of a further 33 tax breaks, including the exemption for stallion fees, donations to third level institutions and income from foreign trusts.

In October, it was revealed that 41 single and married people with incomes in excess of €500,000, paid no tax in 2001. Eleven of the 41 declared incomes of over €1m for tax purposes, and yet had a zero liability to tax.

On November 10, 2004, Frank Daly, Chairman of the Revenue Commissioners told an Oireachtas committee that up to 40 Irish individuals who claim to be domiciled abroad for tax purposes, are being monitored. Zero contributions are made to the cost of public services despite frequent visits here. Each is worth more than €50 million. Daly said that a further 250 individuals who are in the super-rich league are being monitored.

Speculators invest other peoples money and take a %.. If they invest their own money, what's the problem? They got it from somewhere.
Speculation is pretty damn important to an economy if it's done in a regulated manner. They provide the capital to new businesses in the same way a bank does. And the money they use has usually been taxed in some way beforehand.

again LOL

we are not talking about people who are rich in the conventional sense, I'm talking about people so rich they can manipulate the market. So they aren't even speculators in the true sense of the word.

and besides how much tax do currency speculators pay ?

they certainly don't pay DIRT (35%) or CGT (25%) that you or I would pay on the same transactions, otherwise the eurozone crisis would be sorted out by taxing the profits

Perhaps you've heard of the old scam where instead of getting taxed on a lump sum you make on an investment you deposit it in an offshore account and take a loan of your own money. The best bit is not that you pay no tax on the lump sum, it's that you are entitled to write the interest you pay your self off against tax.

23-07-2012 10:51AM

That's fine and true but I'm trying to get across the fact that the 21tr is made up of perfectly normal stuff which the article ignores.

The average joe reads it and thinks 21tr has been stolen by super rich people and it's annoying.

Capt'n Midnight · 23-07-2012 11:27AM

Deleted User wrote: »

That's fine and true but I'm trying to get across the fact that the 21tr is made up of perfectly normal stuff which the article ignores.

The average joe reads it and thinks 21tr has been stolen by super rich people and it's annoying.

Perhaps you should read the article that the BBC site links to http://www.taxjustice.net/cms/upload/pdf/The_Price_of_Offshore_Revisited_Presser_120722.pdf

The!number!of!the!global!superLrich!who!have!amassed!a!$21!
trillion! offshore! fortune!is!fewer! than! 10! million! people.! Of!
these,!less!than!100,000!people!worldwide!own!$9.8!trillion!of!
wealth!held!offshore.!
...
If!this! unreported! $21L32! trillion,! conservatively! estimated,!
earned!a!modest!rate!of!return!of!just!3%,!and!that!income!was!
taxed! at! just! 30%,! this! would! have! generated! income! tax!
revenues!of!between!$190L280!bn!
...
For! our! focus! subgroup! of! 139! mostly! lowLmiddle! income!
countries,! traditional! data! shows! aggregate! external!debts! of!
$4.1!tn!at!the!end!of!2010.!But!take!their!foreign!reserves!and!
unrecorded! offshore! private! wealth! into! account,!and!the!
picture! reverses:! they! had! aggregate! net! debts! of!minus!
US$10.1013.1!tn.!In!other!words,!these!countries!are!big!net!
creditors,!not!debtors.!Unfortunately,!their!assets!are!held!by!
a!few!wealthy!individuals,!while!their!debts!are!shouldered!by!
their!ordinary!people!through!their!governments.!!!

By not paying tax on the interest their capital has grown substantially
if you assume they are getting 6% ( Loans to EU governments) then the doubling time for their money is every 12 years.
In comparison over the same 12 years the value of the assets of most normal individuals and countries have reverted back to where they were 12 years ago.
OK it's a very crude example but it shows how the wealth is transferred by a steady and incidious one way flow of money - by attracting interest without paying tax.

Of course it now means the super-rich can purchase those discounted assets with the big pile of money they've saved up, lining up another round of wealth transfer.

Blowfish · 23-07-2012 11:28AM

Capt'n Midnight wrote: »

I've pointed out that the super rich make money on shuffling paper around. The fortunes the bond holders are making on Eurozone loans aren't generating wealth for anyone else.

You mean aside from the fact that money borrowed through bonds are used to fund government deficits and pay for public services?

Deleted User wrote: »

That's fine and true but I'm trying to get across the fact that the 21tr is made up of perfectly normal stuff which the article ignores.

The average joe reads it and thinks 21tr has been stolen by super rich people and it's annoying.

Indeed, plus it portrays it as if the 21tn is just sitting in random vaults somewhere doing nothing in particular, rather than being either loaned back out or invested elsewhere.

Scioch · 23-07-2012 11:43AM

Blowfish wrote: »

You mean aside from the fact that money borrowed through bonds are used to fund government deficits and pay for public services?

So perhaps the tax payer could get the same deal ? Instead of paying tax to support services just loan the money to the state.

Indeed, plus it portrays it as if the 21tn is just sitting in random vaults somewhere doing nothing in particular, rather than being either loaned back out or invested elsewhere.

No it clearly portrays it as 21tn being shifted out of reach to avoid being taxed on it. Tax which would make a "significant difference to the finances of many countries". Whether its loaned back or invested is irrelevant. I cant decide I dont want to pay tax and loan out my money and claim its all fine, I'm contributing. I wouldnt be contributing to anything other than my own financial interests. Meanwhile others have to pay for that service and the interest on the loans to cover the shortfall which is borrowed from me. Its absolutely ridiculous to claim thats contributing, its nothing but exploiting loopholes to profit from the forced contributions of others.

Blowfish · 23-07-2012 11:56AM

LordSmeg wrote: »

So perhaps the tax payer could get the same deal ? Instead of paying tax to support services just loan the money to the state.

Or, how about we stop states from borrowing in the first place? Reduce their outgoings and reduce tax on everyone. By what people are saying here, this would benefit the low/middle income earners the most.

Scioch · 23-07-2012 12:10PM

Blowfish wrote: »

Or, how about we stop states from borrowing in the first place? Reduce their outgoings and reduce tax on everyone. By what people are saying here, this would benefit the low/middle income earners the most.

So roll back the standard of living for the people dependant on public service to protect the wealth of the super rich ?

How about we stop people putting their private wealth beyond the reach of the revenue and force them to contribute in the same manner everyone else does ?

Chucky the tree · 23-07-2012 12:21PM

LordSmeg wrote: »

How about we stop people putting their private wealth beyond the reach of the revenue and force them to contribute in the same manner everyone else does ?

How?

Scioch · 23-07-2012 12:35PM

Chucky the tree wrote: »

How?

I'm not exactly sure, I'm not well versed on the workings of tax havens or how this can be tackled.

But it should be something to be seriously looked at. Certainly not written off as if those who put their money beyond reach are doing us a favour by loaning it back to us and everything is hunky dory. These people/fund/groups are effectively putting their money beyond where it can contribute and using it to siphon wealth out of society. Thats not contributing to society its exploiting society.

Sir Digby Chicken Caesar · 23-07-2012 12:38PM

no society is trying to exploit them by taking a horribly unfair amount of money from them for no good reason

they already pay far more in tax than everybody else, society has no right to demand more of them.

Scioch · 23-07-2012 12:55PM

Sir Digby Chicken Caesar wrote: »

no society is trying to exploit them by taking a horribly unfair amount of money from them for no good reason

they already pay far more in tax than everybody else, society has no right to demand more of them.

Society trying to exploit people by seeking a contribution in proportion to what you get out of it. Did ya ever hear such utter fcukin rubbish ?

Sir Digby Chicken Caesar · 23-07-2012 01:00PM

what do they get out of society?

i'd imagine they have private health insurance and probably send their children to private schools. they use public roads, they avail of the legal system but have the money to pay for their own counsel, they spend far more than the average person so spend far more in sales tax, their tax spend in terms of money also likely dwarfs the average person whatever nonsense you want to bleat about "proportionality". They put far more money in to society than they take out and that's before you get into the charity donations and various causes rich people are famous for with their charity dinners and bored trophy wives needing something to do.
You're just jealous that they have all this money and want them to suffer for it, it's pathetic.

Capt'n Midnight · 23-07-2012 01:00PM

LordSmeg wrote: »

So perhaps the tax payer could get the same deal ? Instead of paying tax to support services just loan the money to the state.

If you take into account the DIRT the government would claw back it would be cheaper for them to offer us an interest rate of 10% Gross than get funds from the market.

Since the bondholders have not been burnt they are getting back a return that doesn't match their risk.

Perhaps what should have been done is to offer the bond holders a guarantee that their bonds would be paid but at a lower interest rate that reflects the guarantee this would have freed up additional funds. Of course the bondholders could reject the offer if they didn't want the guarantee.

The pension fund arguments don't hold water here, because if the state runs out of money services would have to be paid out of your pension.

Blowfish · 23-07-2012 01:00PM

LordSmeg wrote: »

Society trying to exploit people by seeking a contribution in proportion to what you get out of it. Did ya ever hear such utter fcukin rubbish ?

How is it in proportion to what you get out? The super rich don't use thousands of times the social resources that everyone else does, yet that's what people want them to pay.

Scioch · 23-07-2012 01:11PM

Sir Digby Chicken Caesar wrote: »

what do they get out of society?

i'd imagine they have private health insurance and probably send their children to private schools. they use public roads, they avail of the legal system but have the money to pay for their own counsel, they spend far more than the average person so spend far more in sales tax, their tax spend in terms of money also likely dwarfs the average person whatever nonsense you want to bleat about "proportionality". They put far more money in to society than they take out and that's before you get into the charity donations and various causes rich people are famous for with their charity dinners and bored trophy wives needing something to do.
You're just jealous that they have all this money and want them to suffer for it, it's pathetic.

What do they get out of society ? Your joking right ? Without society they have no wealth, they have no luxury, they have nobody to generate the wealth that keeps them in their positions. Without society they are the same as we are without society. The state props up and runs that society and in doing so protects their interests.

What more do they put in than they get out ? They live lives like the kings of old. They are the most privileged and well taken care of people to ever walk this earth. And a few charity dinners pays for that does it ? If Joe Soap is paying x% of his wealth to live at standard he lives at then how in the hell is it exploitation to ask someone else to pay x% of their wealth to live at a standard a million miles above him ??

Scioch · 23-07-2012 01:13PM

Blowfish wrote: »

How is it in proportion to what you get out? The super rich don't use thousands of times the social resources that everyone else does, yet that's what people want them to pay.

You pay for what society provides you. And society provides more than just resources for people. They get out a life of privilege and luxury, they should be paying the same proportion of their wealth as someone who doesnt. At the moment people who live at a lower standard have to pay more of their wealth to do that.

Edit. And the fact they dont use thousands of times the resources while having thousands of times the wealth actually means the wealth in their hands is less contributory to a society that is powered by consumption. So they are not contributing more to society at all, yet still dont pay the same % of what they have for its betterment. It really is a mass of people at the bottom existing to provide for those at the top. Who think they are entitled to it all simple because they have found a way to take it.

Sir Digby Chicken Caesar · 23-07-2012 01:15PM

i have no objection to people being taxed at the same rate regardless of how much money they make, i'm arguing against the rich being taxed at unfairly high rates just because they have the cheek to have money.

Capt'n Midnight · 23-07-2012 01:15PM

Blowfish wrote: »

You mean aside from the fact that money borrowed through bonds are used to fund government deficits and pay for public services?

http://www.businessweek.com/news/2012-07-22/s-and-p-500-futures-euro-drop-on-growth-concern-corn-hits-record

Germany’s two-year note yield was below zero for the 12th consecutive day and Spain’s 10-year yields surged 22 basis points to 7.49 percent

7.49% over 10 years is 2.059 , double

Unless the bondholders for Spanish debt face a very real chance of loosing money they'll be laughing all the way to the bank.

For Germany it's a no brainer , lots of the super rich may be able to attract low interest rates.

Interest rates are so low now that storing oil in unused supertankers is nearly economic. http://www.msnbc.msn.com/id/47949242/ns/business-stocks_and_economy/t/supertanker-sea-storage-looms-oil-prices-fall/
The word for today is contango
Just another example of how the super-rich don't have to worry about the market when they can manipulate it.

And in the past when speculators have tired to corner the market it's win for them if they win and losses for us when it goes pear-shaped. If you want to talk about pension funds and govt, borrowing remember they get hit both ways.

And they don't like people joining the club as the Quinn's and Lloyds names have shown.

Blowfish · 23-07-2012 01:30PM

LordSmeg wrote: »

It doesnt make sense to me to force someone with less to give more of what they have, it should be equal. And if you earn enough to live a life of luxury then fair play, well done. But trying to protect it at the expense of the living standard of those below you is contemptible to say the least.]

So why not just not take the 100 in the first place? Or take less so you aren't taking money from those that need it?

Scioch · 23-07-2012 01:36PM

Blowfish wrote: »

So why not just not take the 100 in the first place? Or take less so you aren't taking money from those that need it?

To take none your talking about demolishing the state entirely right ? Cant pay for anything in regards to the state if you dont tax people.

If you take less you are still taking more from one person than you are from the other.

As things exists now taxes have to be paid, people have to contribute to the running of that state to protect society as a whole. Services are needed, regulation is needed, peoples rights have to be protected.

So I see no need to dismantle the entire system to protect inequality. Inequality is the problem.

Piste · 23-07-2012 01:38PM

Sir Digby Chicken Caesar wrote: »

i have no objection to people being taxed at the same rate regardless of how much money they make, i'm arguing against the rich being taxed at unfairly high rates just because they have the cheek to have money.

Isn't that exactly what we do with having a higher and lower tax band though?

Scioch · 23-07-2012 02:02PM

Sir Digby Chicken Caesar wrote: »

i have no objection to people being taxed at the same rate regardless of how much money they make, i'm arguing against the rich being taxed at unfairly high rates just because they have the cheek to have money.

I've confused things here by saying income. I meant proportion of wealth, sorry.

In regards to average Joe who has his money in the BOI he's taxed on his private wealth right ? In regards to the people in question they have avoided that. So they dont pay the same amount of their wealth as average Joe Schmoe does.

golden lane · 23-07-2012 02:10PM

why is the governments not taxing these people ( ie. leaving loopholes)...if the money is made in ireland, then the irish government should tax it......never mind where the people wish to live....

money that is part of a countries economy....should be taxed in that economy....

when the have paid their due taxes....they can have as much as they like....nobody elses business.....

Capt'n Midnight · 23-07-2012 02:11PM

Sir Digby Chicken Caesar wrote: »

i have no objection to people being taxed at the same rate regardless of how much money they make, i'm arguing against the rich being taxed at unfairly high rates just because they have the cheek to have money.

What are you talking about ?

This is not about the employee who is on a marginal rate of over 52% by the time you include all deductions. Few if any could be called really rich.

To be blunt 52% is not an unfairly high rate because that's what the vast majority of us would be expected to pay when we hit a fraction ( ~ €36,000 pa ) of their income.

This is about the guys who can claim back VAT on purchases, invest in tax write offs, use offshore accounts, claim non-residency, who can use brown envelopes to get the right decision, who get massive stock options and tax efficient perks and bonuses.

It's stuff like joe soap has to pay BIK on a company car, but if the Directors have a car pool they don't ( by a strange coincidence each director can take the same car each time ) but on a more massive scale.

Unless you can show that a significant number of the people on Ireland's rich list pay anything like 50% of their income in tax then you'll have to accept that they are being subsidised by the PAYE sector.

The super-rich can accumulate wealth because they pay lower tax rates than the average worker.

http://www.irishtimes.com/newspaper/ireland/2011/1119/1224307822609.html Just 10 out of 5,800 Irish citizens who are domiciled here but declared as non residents paid the 'tax exile levy'

http://www.revenue.ie/en/tax/it/residence.html to be non-resident you need to average 225 days abroad each year - half of which could be weekends in Newry. Add in normal rich holidays in summer and winter and you are most of the way there. Or spend the winter working in Oz.

Or if you figure out a way of getting income every second year (cf. loans to self) then you just need to spend 182 days abroad every second year.

At least £21tn in being hidden in global tax havens

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